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Illegal tobacco trade

British American Tobacco Malaysia is committed to raise the understanding and awareness of illegal cigarettes trade as part of our strategic imperative to reduce unfair competition.

Illegal cigarettes are by far the legal cigarette industry's biggest challenge. It is the largest player in the total cigarette market in Malaysia at the expense of legal manufacturers. These illegal cigarettes comprise of largely smuggled cigarettes that come in a variety of names which are not brands belonging to legitimate cigarette manufacturers in Malaysia. The latest Illicit Cigarette Study conducted by Nielsen revealed that the illegal cigarette trade reached a record high of 58.3% in 2017. This indicates that out of 10 packs, 6 are illegal.

The illegal cigarette market can be fueled by large increases in tobacco taxation, which often results in legal cigarettes being made unaffordable to some consumers who then switch to cheap alternative illegal brands.

Trade in illegal cigarettes may cause various unintended consequences, for example, it:

  • Reduces the potential amount of excise that could be collected by the Government
  • Reduces the potential benefit of welfare and development for the people
  • Poses security and safety threat to the nation
  • Undermines the health agenda of the country with respect to smoking
  • Undermines shareholders returns/value and jobs in legal tobacco industry

Whilst the prime responsibility for combating illegal cigarette trade lies with the Government, the tobacco industry (Confederation of Malaysian Tobacco Manufacturers, of which British American Tobacco Malaysia is a member) has a significant role to play in supporting efforts to combat such trade. This includes raising awareness and understanding about the illegal cigarettes trade.

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